Great Moments in Business Journalism

From an article in the print editions of today's Wall Street Journal that was posted to WSJ.com on December 9 at 6:18 p.m. The print headline was "McDonald's Sales Promise Little Mirth":

More disappointment is expected to be on the menu at McDonald's Corp.

After the burger giant last month reported the first drop in monthly sales in nine years, all eyes will be on November same-store sales, which McDonald's plans to report on Monday.

But not much has changed at McDonald's or in the economy since October.

"People are not looking for a big improvement," said Sanford C. Bernstein analyst Sara Senatore. "The macro environment isn't much better. They had very good trends this time last year, so their comps are getting tougher and will be for the next couple of months."

Analysts, on average, expect global sales at McDonald's restaurants that have been open at least 13 months to be up 0.1%, with sales in the U.S. down 0.8%, Europe flat and the Asia-Pacific Middle East and Africa division down 1%.

From an article posted to WSJ.com on December 10 at 8:28 a.m., under the headline "McDonald's Sales Top Forecasts":

McDonald's Corp.'s global same-store sales rose a bigger-than-expected 2.4% in November as the world's largest fast-food chain was able to reverse the decline it reported for October.

Analysts were expecting a 0.17% rise in global sales at restaurants that have been open at least 13 months, according to Consensus Metrix....Same-store sales in the U.S. rose 2.5%, compared with the analysts' estimate of a 0.59% decline...In Europe, same-store sales increased 1.4%—topping analysts' forecast for a 0.1% rise...The Asia/Pacific, Middle East and Africa region posted a 0.6% increase, topping the analysts' projection for a 0.93% drop.

There are two problems here. First, McDonald's sales turned out better than the analyst-driven Journal coverage predicted. Second, the two Journal articles don't even agree on what the analysts' consensus prediction was. The first article said sales would be up 0.1%; the second said "analysts were expecting a 0.17% rise." The first article said analysts expected "sales in the U.S. down 0.8%," the second article said that for the U.S., the analysts had estimated a 0.59% decline. There are similar discrepancies for Europe and for the Asia-Pacific, Middle East and Africa division.

It might be useful for the Journal to highlight how inaccurate these estimates tend to be, instead of repeating them deferentially in advance of company announcements.